For instance, until 2009 the difference between risk margins in Estonia and Finland had been moving in sync. However, when the economic crisis started, Estonian risk margins skyrocketed and last December were 1.92% and 0.93%, respectively.

Economist Andres Arrak says bluntly that margins in Estonia are unlikely to come down any time soon since there is no real competition between banks in Estonia.

“There is no way I can prove it, but I think that they have agreed something,” says Arrak, adding that banks are trying to earn back profits that they lost in the crisis.

The decline in risk margins was also one of the key arguments that the authorities including the governor of the Bank of Estonia Andres Lipstok used when explaining the benefits of eurozone membership.

Surprisingly, now all banks are saying that the risk margin does not depend on currency risks. For instance, a representative of Nordea Pank, said that risk margins of mortgage loans depend less on currency risk and more on the customer’s risk and, more broadly, on the situation in the real estate sector.